Different Approach of International Business

Different approach of Inter habitation(a) bloodline In truth, we take on become part of a globular village and contract a planetary economy where no nerve is insulted from the effects unconnected technical-gradeizes and competition. Indeed, much(prenominal) and much(prenominal) securely atomic number 18 reshaping themselves for kayoedside(a) competition and disc ein truthwhereing new-sprung(prenominal) ways to exploit merchandise come to the fores in every corner of the populace. Failure to take a orbiculate perspective in unitary of the biggest mi spikes managers goat make. Thus we start laying the representation for our backchat by introducing and describing the basic of supranational ancestry.International craft An international note is angiotensin converting enzyme that is base in the main(prenominal) in a single inelegant neverthe slight(prenominal) acquires close to(a) bastardlyingful shargon of its resources or r eveues (or 2) from some some other countries. Sears fits this description. Most of its stores argon in the United States. For example, and the retail merchant earns around 90 percent of its r even come forwardues from its U. S. operation with the stay 10 percent coming sears stores in Canada. At the equal time however, m some(prenominal) of the convergences it lots, such(prenominal) as tools and clothing be made a wide of the mark from every perspective. and wherefore it is clear that we live in a truly globose economy. Virtu tout ensembley on the whole railway line today must be concerned with the militant situations they face in lands for from photographic plate and with how companies from distant lands argon competing in their homelands. Difference approaches of international phone line ar given up infra Importing and work Franchising Licensing correlative impale contrasted positioning Investment oersight intimacy Importing and Exporting Imports Imports contain of proceeding in nears and service (sales, barter, gifts or grants) from non-residents residents to residents.The contain exposition of imports in national accounts includes and excludes specialised live on intoline cases. A frequent delimitation of imports in national accounts is given be number one An import of a expert occurs when at that place is a build of self- eitherow for from a non-resident to a resident this does not necessarily imply that the proper in question bodilyly get everywherees the frontier. However, in particularised cases national accounts impute changes of resultingpower even though in legal terms no change of avouchership takes place (e. g. ross shore financial leasing, cross(a) b golf-club deliveries make forween affiliates of the same cypherprise, goods crossing the border for signifi closinguret carry by dint ofing to order or repair). withal takeation goods must be included in the import measurement. Imports of service consist of all inspection and repair r lastered by non-residents to residents. In national accounts both mighty away pur ensues by residents outside the economic soil of a countrified atomic number 18 recorded as imports of service at that placefore all expenditure by tourists in the economic territory of some other country argon considered as part of the imports of services. the deals ofwise international f first bases of punish equal to(p) services must be included. Basic workmanship statistics a good deal differ in terms of exposition and coverage from the requirements in the national accounts Data on international take in goods atomic number 18 loosely obtained wearye declarations to custom services. If a country applies the ecumenic swap judicature, all goods entryway the country ar recorded as imports. If the special trade system (e. g. extra-EU trade statistics) is applied goods which argon received into customs duty duty storage w behouses atomic number 18 not recorded in orthogonal trade statistics unless they subsequently go into free circulation of the importee country. A special case is the intra-EU trade statistics. Since goods travel freely amidst the subdivision states of the EU without customs controls, statistics on trade in goods between the instalment states must be obtained done surveys. To subdue the statistical burden on the respondents excellent scale traders be excluded from the reporting obligation. Statistical recording of trade in services is establish on declarations by banks to their substitution banks or by surveys of the main operators. In a globalized economy where services contri preciselye be rendered via electronic means (e. . net profit) the related international flows of services atomic number 18 difficult to identify. Basic statistics on international trade normally do not record smuggled goods or international flows of illegal services. A polished fraction of the smuggl ed goods and illegal services whitethorn nevertheless be included in authoritative trade statistics through dummy up shipments or dummy declarations that serve to conceal the illegal nature of the activities. offset of trade Balance of trade represents a end in grade for import and tradeing for a country.A country has demand for an import when municipal quantity demanded exceeds home(prenominal) quantity supplied, or when the monetary value of the good (or service) on the world merchandise is less than the damage on the home(prenominal) market. The balance of trade, familiarly denoted NX, is the difference between the value of the goods (and services) a country exports and the value of the goods the country imports NX = X ? I, or equivalently I = X ? NX A trade deficit occurs when imports are large relative to exports. Imports are impacted in the first place by a countrys income and its crossroadive resources.For example, the US imports fossil oil from Canada even though the US has oil and Canada uses oil. However, consumers in the US are willing to pay more for the marginal barrel of oil than Canadian consumers are, because in that stance is more oil demanded in the US than on that point is oil produced. In macroeconomic theory, the value of imports I advise be musical modeled as a function of the interior(prenominal) absorption A and the accredited exchange pace ?. These are the devil largest factors of imports and they both affect imports positively I = I(A,? ) Types of import in that location are two basic grammatical cases of import 1. industrial and consumer goods 2. Intermediate goods and servicesCompanies import goods and services to translate to the domestic market at a cheaper price and better quality than competing goods manufactured in the domestic market. Companies import overlaps that are not agreeressable in the topical anaesthetic market. There are three broad types of importers 1. Looking for some(prenominal) harvest-tide around the world to import and cheat on. 2. Looking for unlike sourcing to get their produces at the cheapest price. 3. Using orthogonal sourcing as part of their global supply chain. consider-import refers to a type of avocation importation involving a major retailer (e. g. Wal-Mart) and an overseas manufacturing moving in.A retailer typically purchases harvest-times send offed by local anaesthetic companies that give notice be manufactured overseas. In a coordinate-import program, the retailer bypasses the local supplier (colloquial middle-man) and buys the final product bringly from the manufacturer, possibly saving in added be. This type of note is fairly recent and adopts the trends of the global economy. mapping of the Internet Many online auction websites are in good order off providing wholesalers through a wholesale list, generally, the lists that require a fee to view, whitethorn not be updated frequently, the entropy whitethorn be old, and the companies listed whitethorn no hourlong be in argumentation.Another work on of online middlemen are B2B trade companies. These cater mainly to big backupes who are importing large quantities of goods from conflicting countries. They in any case gather in sister sites that serve smaller orders for small commercees. In addressing the concerns of listed companies legitimacy and depend exponent, such B2B portals whitethorn inspect suppliers at their actual premises before they list suppliers. Alternatively, these companies may in any case branch out of cyberspace and work up their consume sourcing fairs, where thousands of buyers and suppliers feces meet face-to-face. Statistical infoData on the value of imports and their quantities frequently broken in d admit by detailed lists of products are available in statistical collections on international trade published by the statistical services of inter political sympathiesal organizations (e. g. UNSTAT, FAOSTAT, OECD ), supranational statistical institutes (e. g. Eurostat) and national statistical institutes. Exports The definition of export is when you trade something out of the country. In economics, an export is any good or commodity, transported from one country to another country in a legitimate work, typically for use in trade.In national accounts exports consist of exertions in goods and services (sales, barter, gifts or grants) from residents to non-residents. The exact definition of exports includes and excludes specific borderline cases. A general delimitation of exports in national accounts is given below An export of a good occurs when on that point is a change of self-command from a resident to a non-resident this does not necessarily imply that the good in question physically crosses the frontier. However, in specific cases national accounts impute changes of ownership even though in legal terms no change of ownership takes place (e. . cross border financial leasing, cross bo rder deliveries between affiliates of the same enterprise, goods crossing the border for signifi movet work ating to order or repair). excessively smuggled goods must be included in the export measurement. Export of services consist of all services rendered by residents to non-residents. In national accounts any direct purchases by non-residents in the economic territory of a country are recorded as exports of services therefore all expenditure by in charm tourists in the economic territory of a country is considered as part of the exports of services of that country.Also international flows of illegal services must be included. regale Methods of export include a product or good or information beingness mailed, hand-delivered, shipped by air, shipped by boat, uploaded to an internet site, or downloaded from an internet site. Exports as well as include the distri simplyion of information that can be sent in the form of an email, an email attachment, a fax or can be shared dur ing a telephone conversation. Advantages of export possession advantages are the fasts specific assets, international experience, and the ability to excogitate either low-cost or diametriciated products deep down the contacts of its value chain.The vocational advantages of a particular market are a combination of market potential drop and investment happen. Internationalization advantages are the make headways of retaining a sum total competence within the confederacy and threading it though the value chain rather than obtain to license, outsource, or administer it. In relation to the Eclectic paradigm, companies that have low directs of ownership advantages either do not enter extraneous markets. If the union and its products are equipped with ownership advantage and internalization advantage, they enter through low- attempt modes such as exporting.Exporting requires significantly lower train of investment than other modes of international expansion, such as FDI. As you might expect, the lower risk of export typically results in a lower rate of return on sales than possible though other modes of international business. In other words, the usual return on export sales may not be tremendous, but neither is the risk. Exporting allows managers to exercise operation control but does not provide them the option to exercise as lots market control.An exporter normally resides far from the end consumer and often enlists different intermediaries to manage marketing activities. Disadvantages of exporting For Small-and-Medium Enterprises (SME) with less than 250 employees, transmiting goods and services to foreign markets seems to be more difficult than serving the domestic market. The lack of acquaintance for trade regulations, heathenish differences, different languages and foreign-exchange situations as healthy as the strain of resources and staff interact like a block for exporting.Indeed there are some SMEs which are exporting, but nearly two- third of them sell in only to one foreign market. The by-line assumption delivers the main disfavours Financial way lawsuit To minimize the risk of exchange-rate fluctuation and transactions touch ones of export activity the financial steering needs more capacity to cope the major effort node demand International guests demand more services from their vendor like installation and startup of equipment, concern or more delivery services. Communication technologies makeion The improvement of communication technologies in recent historic period enable the customer to interact with more suppliers opus receiving more information and cheaper communications cost at the same time like 20 old age ago. This leads to more transparency. The vendor is in duty to follow the real-time demand and to submit all transaction details. guidance mistakes The counseling might tap in some of the organizational pitfalls, like poor infusion of oversea agents or distributors or chaotic glo bal organization. Ways of exportingThe ships confederacy can make up ones mind to export directly or indirectly to a foreign country. carry on selling in export strategy Direct selling involves sales representatives, distributors, or retailers who are located outside the exporters home country. Direct exports are goods and services that are sold to an sovereign party outside of the exporters home country. chiefly the companies are pushed by core competencies and improving their performance of value chain. Direct selling through distributors It is considered to be the close popular option to companies, to develop their own international marketing capability.This is achieved by charging personnel from the companionship to give them great control over their trading operations. Direct selling also give the association greater control over the marketing function and the opportunity to earn more profits. In other cases where vane of sales representative, they company can tran sfer them sole(prenominal) rights to sell in a particular geographical region. A distributor in a foreign country is a merchant who purchases the product from the manufacturer and sells them at profit. Distributors commonly carry stock parentage and service the product, and in most cases distributes deals with retailers rather than end users.Evaluating Distributors The size and capabilities of its sales force. Its sales record. An analysis of its territory. Its veritable product mix. Its facilities and equipment. Its marketing polices. Its customer profit. Its promotional strategy. Direct selling through foreign retailers and end users Exporters can also sell directly to foreign retailers. Usually, products are limited to consumer lines it can also sell to direct end users. A good way to beat such sales is by printing catalogs or attending trade shows. Direct selling over the InternetElectronic commerce is an weighty mean to small and big companies all over the world, to trade internationally. We already can see how important E-commerce is for marketing growth among exporters companies in emerging economies, in order to overcome capital and nucleotide barriers. E-commerce eased engagements, provided scurrying and cheaper delivery of information, generates quick feedback on new products, improves customer service, accesses a global audience, levels the field of view of companies, and support electronics information interchange with suppliers and customers. Indirect sellingIndirect exports, is only if selling goods to or through an independent domestic intermediary in their own home county. Then intermediaries export the products to customers foreign markets. Making the export stopping point Once a company determines it has exportable products, it must still consider other factors, such as the side by side(p) What does the company want to work from exporting? Is exporting consistent with other company intentions? What demands will expo rt place on the companys key resources focusing and personnel, deed capacity, and finance and how will these demands be met? argon the expected benefits worth the costs, or would company resources be better utilise for developing new domestic business? Challenges Exporting to foreign countries poses challenges not found in domestic sales. With domestic sales, manufacturers typically sell to wholesalers or direct to retailer or even direct to consumers. When exporting, manufacturers may have to sell to importers who then in turn sell to wholesalers. Extra layer(s) in the chain of distribution squeezes margins and manufacturers may need to crack lower prices to importers than to domestic wholesalers.Franchising Why choose franchising? Although more a(prenominal) people dream around kick the bucketning their own business, few actually possess the experience or the capital needed to turn that dream into a reality. Franchising however, is a comfortable alternative to running a business entirely on your own. After acquire a right license, youre ready to set up a business for yourself but not by yourself. What is franchising? The term franchising can describe some very different business positions. It is important to infrastand on the dot what youre being offered. Advantages Independence You are your own boss, the business success depends on you and you will spend a big part of your life surrounded by learning children. picpicMinimized risk A concourse of experience business people with a vested interest in your success is waiting to guide you through the process From writing a yearly Business Plan, through choosing the top hat marketing tactics to defining your commercial goals. Brand recognition Helen Doron Early English is an internationally ac friendshipd and respected blur, granting you a strong position in the market from day one. Thorough fosterage Our intensive training courses prepare you with the highest level of organizational, bu siness, administrative and pedagogic know-how. On Going support horizontal after the first few months, the business team is always there to offer advice and support. Educational excellence Teaching English to children with the Helen Doron Early English mode ensures that your students will be fluent speakers and thus have access to better education and professions Disadvantages Costs may be higher than you expect.As well as the initial costs of buying the franchise, you pay proceed management service fees and you may have to agree to buy products from the franchisor. The franchise agreement usually includes restrictions on how you run the business. You might not be able to make changes to suit your local market. The franchisor might go out of business. Other franchisees could give the brand a bad reputation. You may find it difficult to sell your franchise you can only sell it to psyche approved by the franchisor. All profits are shared with the franchisorBusiness format franchise This is the most common form of franchising. A true business format franchise occurs when the owner of a business (the franchisor) grants a licence to another person or business (the franchisee) to use their business idea often in a specific geographical area. The franchisee sells the franchisors product or services, trades chthonian the franchisors trade mark or trade denote and benefits from the franchisors help and support. In return, the franchisee usually pays an initial fee to the franchisor and then a persona of the sales revenue.The franchisee owns the outlet they run. But the franchisor keeps control over how products are marketed and sold and how their business idea is used. long-familiar businesses that offer franchises of this kind include Prontaprint, Dyno-Rod and McDonalds. Other types of arrangement Different types of sales relationships are also somemultiplication referred to as franchises. For example Distributorship and dealership you sell t he product but dont usually trade infra the franchise name. You have more freedom over how you run the business. Agency you sell goods or services on behalf of the supplier. Licensee you have a licence giving you the right to make and sell the licensors product. There are usually no extra restrictions on how you run your business. Multi-level marketing Some businesses offer franchises that are really multi-level marketing. free-lance distributors sell goods on a manufacturers behalf. You get outfit on any sales you make, and also on sales made by other distributors you recruit. Be aware that some multi-level marketing schemes may be dishonest or illegal Pizza hovel Are your core business processes falling through the cracks in a flood of E-mail? Does your small or long suit business have to coordinate with people in several(prenominal) other companies and with freelancers? not sure where work is acquire stuck in the occupation? Ever forgotten to send or chase up an invoic e? Its a ordinary that business owners should work on their business, not in it. Businesses need architecting and structuring in the same way as software does, so that they can run without you the silk hat way to do that is through careful design and automation of the underlying processes. Becoming a subdivision of the New Rich is not just near working smarter.Its about structure a system to replace yourself. Tim Ferriss, The 4-Hour Work Week The national of Business solve Modeling has long been seen as the preserve of enterprises, who invest tens of thousands of dollars and many man-months in building complex installed systems designed to manage thousands of employees. But the same techniques, made much more affordable and simple, are just as important for small and medium businesses, particularly as these companies rely more and more on home workers and get distributed across quadruple countries and time-zones.Process modeling and automation can be affordable and simple, with Rain flow, a cloud based Software-as-a-Service (SaaS) process design and execution platform. Rain course allows you quickly build a set of processes that dont stop at your companys boundaries Pretend that your business is going to serve as the model for 5,000 more just like it Michael E. Gerber, The E-myth Revisited Process automation ensures that tasks dont fall through the cracks Import processes from our Pre-defined Process Library, covering a variety of common needs (invoicing, memorandum approval, support etc. Import your contacts from G mail or observatory and hold your own Org-Chart Customize or create brand new processes using our online graphic Process Design Tool Automatically generate musical accompaniment for the processes, a great first step towards ISO 9001 obligingness Low monthly fee dont get hammered every time you add a col labor movementator Investors invest in good systems and people who can build good systems. Investors do not like to invest in businesses where the system, goes home at night. Robert Kiyosaki, Rich Dads address to Investing Tasks are automatically assigned to employees, freelancers and even workers in other companies Customizable E-mail alerts and reminders Web-based UI for all participants show their current tasks and processes, wherever they access from Managers get an overview of what processes are in operation, where they get stuck and how they can be meliorate Franchising Conclusion The franchising can give you a good start into the entry of the business for some people, sometimes entirely new running any business of their own.All you need to do is to follow the already exist formula with the training, advice and marketing. But, you are still expend some of your life savings. So it is best to do research before you invest and take the advice of experienced professionals. For the franchisors, to be this experienced advice is as least beneficial, for without it, they may have an unsuccessful f ranchise but they will also put their whole business in a bad position and place their livelihoods, lifesavings and all of their franchisees in danger. LicensingAn arrangement where by one company allows another company to use its brand name, trade-mark, engineering science, patent, secure or other assets in exchange for a royally based on sales. A company may prefer to arrange for a foreign company to manufacture or market its products under a licensing agreement. Factor that may lead to this purpose include excessive transportation costs, government regulations and home production costs. ? Licensed a legal document giving official permission to do something. ? Having been issued with a license by the required authority. License is Aya Uetos fourth Japanese solo studio album. ? liberty to deviate deliberately from normally applicable rules or practice. Securing a patent license or an contrivance license is hard, frustration and the consuming. The all ration of licensing trade mark for business intention. Appears to be at an all time high mostly in the fashion area, where by customers are buying more licence products and brand names than ever before. For example Coca-cola is licensing company. Coca-cola companys detailsCoca-cola Hellenic was a broach foreign investor in Belarus first licensing a local manufacture in 1994 and than setting up its own production facilities in 1997. Its original us $42 jillion investment was the first green field emergence in Belarus by a foreign investor. Today, after almost us $ 120 million of investment, Coca-cola Hellanic has four production lines in Belarus producing Coca-cola, Fanta, Sprite, Schweppes, local brand Frunktime. In the summer and over Christmas the lines run 24 hours a day and it employs 550 people in its manufacturing gallery quarters and across its nation wide sales, warehouse and distribution network.Because of its early entry to the market, Coca-cola Helenic now has more or less 25% of rapidly on togeny soft drinks market in Belarus. Coca-cola Hellenic also plays an active case in helping the government improve the business climate in Belarus through its founding member ship of the foreign investment advisory council. Coca-colas task environment Competitor Pepsi cola septette up 8 Inca Kola strategical participator Wash vile Coca-cola system evolution providers Human right alert covalence SA Coca-cola trading companyCustomers Coca-cola Global History of Bottling Regulations organisation Licensing is leasing a legally protected property like trade marked or copy righted name, logo, likeness, character, pronounce or design to another party in combination with a product service or promotion. It is a process which lays stress on consumer management, development of brand uprightness in the with international imagery, providing right shopping air and perhaps is less about manufacturing. Advantages of Licensing 1. An stratagem incentive-We believe that having a stake in a products actual commercial success unleashes the ultimate incentive for the inventor and results in the best design solutions. A licensing agreement accomplishes this by honour an inventor with a reasonable royalty for his or her. 2. A product head start- The times and money that a company normally spends on the R & D phase can sort of be invested in a products a fictive resource and a business ally,. 3. Fair & equilibrate - The royally can very with each product in order to consider such factors as the licenses to be ling, manufacturing and promotional expense. produce Exclusivity A license can grant to a manufacture exclusive right to make and sell products relating to the license and any associated patents. 4. Licensing is often the best bet for an ancestry. 5. Licensing is less risky for inventory because the license arrogate all business task 6. little dearly-won and inventory to spend more time inventing. 7. Less money and offers freedom to live and work any where. Disadvantages 1. Very few inventors can retire and their inventory royalties. 2. If license invention only receive a small percentage of sales. 3.Potential pay of for licensing an invention is much smaller that introduction. License is a process which lays stress on consumer management, development of brand equity in the international imagery, providing right shopping ambience and perhaps is less about manufacturing. Licensing is away of growing with an already riged brand. It provides the brand recall benefit, which are not achievable is case one comes out with a brand new image. There are many types of licensing business like art & design, somatic brands, events, fashion brand, food & drinks. Strategic AlliancesElmuti and Kathawala (2001) and nuts et al. (2008) exempt that a strategic alignment consists of companies who do business together to reach each companys strategic goals. Wild et al. (2008) state that strategic compacts are similar to reefer ventures since they can t ake place for a short period of time up to several months, depending on the strategic goals. ensample 1 Motorola initially found it very difficult to gain access to the Japanese cellular telephone market in the mid 1980s as the firm complained loudly about formal and informal Japanese trade barriers.The turning point for Motorola came in 1987 when it assort itself with Toshiba to build microprocessor. As part of this deal, Toshiba provided Motorola with marketing help, including some of its best managers. This helped Motorola in the political game of securing government approval to enter Japanese market and getting radio frequencies assigned for its mobile communications systems (Hill, 2006). Example 2 In 2003, Microsoft and Toshiba established an alliance aimed at developing embedded microprocessors that can perform a variety of entertainment functions in an automobile.The processors will run a version of Microsofts Windows CE run system. Microsoft brings its software engineeri ng skills to the alliance and Toshiba its skills in developing microprocessors (Hill, 2006). Example 3 In 1999, typewriter ribbon Computer, the take maker of personal digital assistance entered into an alliance with Sony under which Sony agree to license and use Palms operating system in Sony PDAs. The motive for the alliance was in part to help establish Palms operating system as the industry standard for PDAs, as opposed to a rival Windows based operating system from Microsoft (Hill, 2006).Elmuti and Kathawala (2001) and Wild et al. (2008) also explain that a strategic alliance can give a company several advantages. Advantages of Strategic Alliances Reduction of costs Decreased financial and economic risks Getting a glimpse of the others competitive advantages such as technology Getting access to the others market and distribution channel Disadvantages of Strategic Alliances The primary disadvantage of strategic alliances is that it can create disagreements between the comp anies which can create a future competitor (Wild et al. 008). fit hazard A join venture is when two or more firms establish a new firm that is voicely owned, but sometimes one company has a majority share. The main reason to use a pronounce venture as entry mode is that the companies share the risk and costs amongst them. But there is also the benefit of entering a market with a company from the armament country as they have experience of doing business in that specific country. The local alliance render has a firsthand knowledge of the political and cultural system in the host country.In some countries, this is the only entry mode possible for companies callable to political and legal policies that prohibit foreign ownership (Hill, 2006). Example 1 The Adidas Group and Vulcabras SA have agreed to form a pronounce venture company with Reebok International Ltd to distribute Reebok footwear, apparel and accessories in brazil nut and Paraguay. Financial details were not disclo sed, but under the terms of the agreement Pedro Grendene Bartelle will be death chair and chairman of the new joint venture company, which will be governed by a board of directors to be comprised of Reebok and Vulcabras executives.The joint venture agreement expires at the end of 2015 (Globe Business Publishing Ltd, 2008). Example 2 Toshiba retention Device Division has introduced its new DVD ROM, which is the first drive to ship from the new Toshiba Samsung Storage engine room (TSST) joint venture. Headquartered in Japan, the TSST joint venture involves product and business planning, product development, procurement and sales for ocular disk-drives, including CD-ROM, CD Recordable, DVD Recordable and DVD-ROM drives. The organization is 51 percent owned by Toshiba and 49 ercent owned by Samsung and has combined annual sales exceeding $1. 8 billion (eMedia Asia Ltd, 2008). Example 3 Sony Ericsson Mobile communications AB is a joint venture between Ericsson and Sony. It offers mob ile communications products for people who appreciate the possibilities of goodish technology. Established in 2001 by Telefonaktiebolaget LM Ericsson and Sony Corporation, the joint venture continues to build on the success of its two innovative parent companies. Sony Ericsson creates value for its operator customers by bringing new ways of using multimedia system communications while mobile.The companys management is based in London, and has 4,000 employees across the globe working on research, development, design, sales, marketing, distribution and support Advantages of Joint Venture Wild et al. (2008) state that using a joint venture while entering a country decreases the risk since the exposure is reduced to the parts of the company they have contributed to the joint venture. Joint ventures can also provide an access to the other partners distribution channels. However, Wild et al. (2008) and Osland et al. 2001) further point out that joint ventures can create disagreements be tween the owners and a loss of control when one owner has knowledge or information that the other lacks. Disadvantages of Joint Venture There are several disadvantages with a joint venture. As in every partnership there is a possibility that friction will occur. It can easily be conflicts in a joint venture in questions of investments and corporate goals. There is also the possibility of a power struggle in order to gain control.Joint venture also has some disadvantages similar to licensing as it can reduce the ability to achieve experience curve economies and location advantages. The risk of losing control of the companys specific assets such as technological know-how may also occur (Hill, 2006). extraneous Direct Investment Foreign direct investment occurs when a firm headquartered in one country builds or purchases operating facilities or subsidiaries in a foreign country. The foreign operations then become wholly owned subsidiaries of the firm. For example, crossings acquisition of Jaguar, Volvo and Kia.Dell Computers new factory in china is a direct investment. A major reason many firms make foreign direct investments is to capitalize on lower labor costs. In other words, the goal is often to transfer production to locations where labor is cheap. Japanese businesses have moved much of their production to Thailand because labor costs are much lower there than in Japan. There are two strategies used in foreign direct investment. 1. Brownfield 2. Greenfield Brownfield Investment When a company or government entity purchases or leases lively production facilities to launch a new production activity.For example, BANGLALINK Banglalink Banglalink is the second largest cellular service provider in Bangladesh after Grameenphone. In September 2004, Orascom telecom retention purchase 100% of the share of Sheba Telecom (Pvt. ) Ltd. Sheba had a base of 59000 users, of whom 49000 were regular when it was sold. Afterward it was re-branded and launched its service und er the Banglalink brand on February 10, 2005. The task environments of Banglalink are Competitors Grameen Aktel Warid Citycell Teletalk Customers item-by-item consumers Institutional customersSuppliers Siemens Wholesale parts processors advancement manufacturers Strategic partners BTRC Nokia-Siemens Network Regulators BRTC Securities and Exchange commission law department Greenfield Investment A Greenfield investment is the investment in a manufacturing, office, or other physical company related structure or group of structures in an area where no previous facilities exist. Greenfield expend is usually offered as an alternative to another form of investment such as merger and acquisition, joint venture or licensing agreement.Greenfield investing is often mentioned in the context of Foreign Direct Investment. For example Warid Telecom Warid Telecom Warid Telecom International Ltd. is a GSM based cellular operator in Bangladesh. Warid was the sixth mobile phone ca rrier to enter the Bangladesh market and launched commercial operation on May 10, 2007. Warid telecom international LLC an Abu Dhabi based consortium, sold a majority 70% stake in the company to Indians Bharti Airtel Ltd. for US $300 million. The task environments of Warid are Competitors Grameen Aktel Citycell Teletalk Banglalink Customers various(prenominal) consumers Institutional customers Suppliers Samsung Wholesale parts processors Packaging manufacturers Strategic partners BTRC Samsung Network Regulators BRTC Securities and Exchange commission Police department Like the other approaches for increasing a firms level of internationalization, direct investment carries with it a number of advantages and disadvantages. They are discussed below Advantages of foreign direct investmentEnhanced control In foreign direct investment managerial control is more complete and profits do not have to be shared as they do in joint ventures. Existing foot Existing infrastructur e is another advantages of foreign direct investment. Purchasing an existing organization provides additional benefits is that the human resources and organizational infrastructure are already in place. Consume the cost of introducing a new brand Acquisition is also a way to purchase the brand name identification of a product.This could be particularly important if the cost of introducing a new brand is high. Disadvantages of foreign direct investment Complexity Complexity is one of the disadvantages of foreign direct investment. In decision do it creates great complexity. Greater economic and political risk In this approach a firm starts business in foreign country in greater economic and political risk. Greater uncertainty Foreign direct investments have some advantage but the firm work in greater uncertainty. Management ContractWild et al. (2008) explain that a management indenture is when one business gives another managerial expertise. The authors further point out that manage ment contracts are often used by the public domain moreover. This entry mode is not used on a one time basis but rather during an extended time period. There are several advantages to gain by using management contracts as an entry mode, for example international business opportunities can arise and there may be an increase of expertise of local workers.This entry mode reduces the exposure and risk of losing physical assets, however the employees may still be exposed to risks and management contracts can create a future competitor in the local market. Conclusion From the above discussion following conclusion can be drawn In symmetry with the view of (Hill, 2006) managers of international businesses need to think about that foreign manufacture can improve their capabilities over time, and this can be of immense strategic benefit to the firm. Rather than viewing foreign assembly process as sweatshops where unskilled labor churns out low cost goods, manager need to view them as ote ntial centers of excellence and to encourage and foster attempts by local managers to upgrade the capabilities of their factories and thereby, foreign assembly can serve as a source of competitive advantage. And the various case studies discussed in the easy supports this statement. In accordance with the view of (Lankford & Parsa, 1999), contract manufacturing can enable an organization to gain competitive advantage when products or services are produced more effectively and efficiently by outside suppliers.The advantages in contract manufacturing can be operational, strategic, or both. Operational advantages usually provide for short trouble avoidance, while strategic advantages offer long contributions in maximizing opportunities. However, suggestions of (Harland et al. 2005) cannot be under estimated who suggested that the visitation to manage outsourcing relationships properly, perhaps through service level agreements, may reduce customer service, levels of control and cont act with the international customers and suppliers. Finally it may be mentioned that it is appropriate to use contract manufacturing or foreign assembly within an international marketing strategy when risk factors are identified and dealt with precision and careful strategic analysis. Appropriateness of embedding contract manufacturing and foreign assembly within an international marketing strategy depends of how precisely an organization can manage multiple relationships in different environmental context and gain competitive advantage.The main goal of foreign manufacturing and foreign assembly process is to increase and sustain the organizational competency. As utter in the discussion that the rationale behind establishing a foreign manufacturing facility, the strategic role of foreign factories can evolve over time and success of such strategy depends on the organizations ability to respond in the ever changing global environment.